Stiff competition throttles Pakistan’s wheat export
Domestic prices likely to fall due to lack of storage.
ISLAMABAD:
Cheap Black Sea wheat is undercutting exports from Pakistan and is likely to keep the South Asian country out of the market for several months, traders said on Monday.
Asia’s third-largest wheat producer, Pakistan resumed wheat exports in January for the first time in three years and sold nearly 1.8 million tons by June, before being knocked out of the market by fierce competition from Russia.
“After the Russian entry, there has been a drastic downward change in prices and despite having ample stocks, we don’t think we can sell any wheat in the current scenario,” Johar Ali Qandhari, a leading trader, told Reuters. “To my information, the last shipment was early this month. We cannot sell wheat at the prevailing rates.”
Pakistan was aiming to export nearly three million tons of wheat by mid-July. Most of the wheat sold went to East Africa, Middle East and Bangladesh. Traders said shipments in January were sold at up to $350 per ton fob (freight on board), and they made their last deals around $304-305 per ton fob.
Pakistan does not have the storage capacity for excess stocks, so domestic prices will likely be driven downward as the unexported wheat is dumped on the home market, he added.
Published in The Express Tribune, July 12th, 2011.
Cheap Black Sea wheat is undercutting exports from Pakistan and is likely to keep the South Asian country out of the market for several months, traders said on Monday.
Asia’s third-largest wheat producer, Pakistan resumed wheat exports in January for the first time in three years and sold nearly 1.8 million tons by June, before being knocked out of the market by fierce competition from Russia.
“After the Russian entry, there has been a drastic downward change in prices and despite having ample stocks, we don’t think we can sell any wheat in the current scenario,” Johar Ali Qandhari, a leading trader, told Reuters. “To my information, the last shipment was early this month. We cannot sell wheat at the prevailing rates.”
Pakistan was aiming to export nearly three million tons of wheat by mid-July. Most of the wheat sold went to East Africa, Middle East and Bangladesh. Traders said shipments in January were sold at up to $350 per ton fob (freight on board), and they made their last deals around $304-305 per ton fob.
Pakistan does not have the storage capacity for excess stocks, so domestic prices will likely be driven downward as the unexported wheat is dumped on the home market, he added.
Published in The Express Tribune, July 12th, 2011.